GM finishes 2012 with $4.9 billion profit

Among new products coming this year from GM is this 2014 Chevy Cruze Diesel -- the first diesel car from a U.S. maker since the 1980s -- that was unveiled by Cristi Landy, Marketing Director Chevrolet Small Cars, at the Chicago Auto Show last week.(Photo: Charles Rex Arbogast AP)

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General Motors on Thursday reported a third-consecutive year of profitability, with net earnings in 2012 of $4.9 billion, and said 2013 results would be driven by a wave of new products in the U.S. and worldwide.

The 2012 net was down 36% from 2011, as strong results in North America were offset by larger losses in the ailing European market and a complicated bundle of special charges. Revenue for 2012 was $152.3 billion, up 1%.

GM's new product schedule is just now recovering from a big gap created by its bankruptcy reorganization and will include what CFO Dan Amman called "an onslaught" of launches extending through 2013.

The biggest will be the redesigned Chevrolet Silverado and GMC Sierra full-size pickups that begin rolling out next month. The trucks are "our most important news," CEO Dan Akerson told Wall Street analysts in a conference call.

Other important product launches include a Chevrolet Impala sedan and Corvette sports car. Cadillac just launched the smaller ATS sedan and will show a new generation of its CTS sedan. GM is making incremental improvements to existing products, such as its just-announced addition of a high-mileage diesel engine option this summer for its high-volume Chevy Cruze compact -- its first diesel car in the U.S. since the 1980s.

"With over a dozen new and refreshed models for 2013, particularly the highly profitable full-size trucks, GM's outlook remains positive for continued growth in North America, China, India and Brazil, despite the stubborn European market challenges," says veteran industry analyst Jesse Toprak of TrueCar.com.

GM reported fourth-quarter earnings of $892 million, up 89% from a year ago. The quarter's earnings per share of 48 cents, excluding special items, was below Bloomberg's consensus estimate of 51 cents. Revenue for the quarter was $39.3 billion, up 3%.

Analyst Peter Nesvold at Jefferies in a note to clients sees some concerns in the results. "Some of the operating metrics in North America seemed light to us," he wrote, pointing to GM's lack of big profit margins compared with some major rivals and a drop in market share.

GM's U.S. share was 17.9% for 2012, according to Autodata, down from 19.6% in 2011, as Japanese automakers' U.S. sales recovered strongly from 2011 declines due to the tsunami in Japan.

But Nesvold was positive on GM's outlook based on the schedule of new products, "Much of this will likely be self-correcting given GM's substantial product pipeline over the next 12-18 months."

Brian Johnson, analyst at Barclays, said in a note to clients that the full benefit of the new products may not come until 2014 and that this year will be a challenge for GM.

GM reaffirmed its forecast of breaking even by mid-decade in Europe, where it lost $699 million in the quarter, up from $562 million a year ago. The total 2012 loss there was $1.8 billion, more than double the $747 million a year ago.

GM is last of the major car companies to report the quarter. The Detroit makers all were profitable overall, but Europe continues to bleed money for Ford Motor as well as GM. Chrysler Group escapes because it has no significant operation in Europe, but bankruptcy rescuer and majority owner Fiat now is depending on Chrysler to help offset its European losses.

To overhaul money-losing Europe, GM will put a new man in charge of Opel -- GM's European auto unit. Karl-Thomas Neumann, a turnaround expert, becomes chairman of the management board of Adam Opel on March 1. He also becomes president of GM Europe and a GM vice president.